SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 18, 2004
-------------------------------
GOVERNMENT PROPERTIES TRUST, INC.
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(Exact name of registrant as specified in its charter)
Maryland 1-31962 20-0611663
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
10250 Regency Circle, Suite 100, Omaha, Nebraska 68114
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (402) 391-0010
-----------------------------
None
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(Former name or former address, if changed since last report)
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant hereby amends the following items, financial statements, exhibits or
other portions of its current Reports on Form 8-K dated May 18, 2004, as filed
on May 18, 2004, and June 18, 2004, as filed on June 18, 2004, to include the
historical financial statements and pro forma financial information required by
Item 7 (a) and (b).
1
TABLE OF CONTENTS
Item 2. Acquisition of Assets .................................................. 3
Item 7 Financial Statements, Pro Forma Financial Information, and Exhibits .... 4
(A) Financial Statements of Real Estate Operations Acquired ................
(1) United States Federal Bureau of Investigation Branch Office -
Pittsburgh, Pennsylvania .......................................... 4
Report of Independent Registered Public Accounting Firm ........... 4
Statements of Revenue and Certain Expenses for the three months
ended March 31, 2004 (unaudited) and for the nine months ended
September 30, 2003. ............................................... 5
Notes to Statements of Revenue and Certain Expenses ............... 6
(2) Food & Drug Administration District Headquarters - Lenexa, Kansas .
Report of Independent Registered Public Accounting Firm ........... 7
Statements of Revenue and Certain Expenses for the three months
ended March 31, 2004 (unaudited) and for the year ended
December 31, 2003 ................................................. 8
Notes to Statements of Revenue and Certain Expenses ............... 9
(B) Pro Forma Financial Information (unaudited) ............................ 10
(1) Pro Forma Consolidated Balance Sheet as of March 31, 2004 ......... 11
(2) Pro Forma Consolidated Statement of Operations for the three
months ended March 31, 2004 ....................................... 15
(3) Pro Forma Consolidated Statement of Operations for the year ended
December 31, 2003 ................................................. 16
(C) Exhibits ............................................................... 18
(D) SIGNATURE .............................................................. 19
2
ITEM 2. ACQUISITION OF ASSETS
On May 4, 2004, Government Properties Trust, Inc. (the Company) completed its
previously announced acquisition of the United States Federal Bureau of
Investigation (FBI) Building in Pittsburgh, PA (the Pittsburgh Property) for
approximately $27.8 million excluding closing costs. The Pittsburgh Property,
completed in 2001, is fully leased by the federal government under a modified
gross lease. The property is occupied by the FBI and totals over 87,000 leasable
square feet of office space. With the integrated parking facility included in
the total, the property consists of approximately 161,000 gross square feet. The
current lease expires in October 2016.
On June 14, 2004, the Company completed its previously announced acquisition of
the United States Food & Drug Administration (FDA) Building in Lenexa, KS (the
Lenexa Property) for approximately $10.5 million. The Lenexa Property, completed
in 1991, is fully leased by the federal government under a modified gross lease.
The property is occupied by the FDA and consists of two buildings on 5.05 acres
of land. The primary building consists of office/lab space and totals over
48,000 leasable square feet. A secondary annex building consists of over 5,000
leasable square feet. The current lease for the primary building expires in June
2012 and the lease for the annex building expires in September 2012.
Each purchase price was determined through arms-length negotiation between the
Company and the seller. The Company funded the purchase price with cash on hand.
3
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, AND EXHIBITS
GOVERNMENT PROPERTIES TRUST, INC.
UNITED STATES FEDERAL BUREAU OF INVESTIGATION BRANCH OFFICE --
PITTSBURGH, PENNSYLVANIA
STATEMENTS OF REVENUE AND CERTAIN EXPENSES
FOR THE THREE MONTHS ENDED MARCH 31, 2004 (UNAUDITED) AND FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 2003
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors of
Government Properties Trust, Inc.
We have audited the accompanying Statement of Revenue and Certain Expenses of
United States Federal Bureau of Investigation Branch Office - Pittsburgh,
Pennsylvania (the Property) for the nine months ended September 30, 2003. This
Statement of Revenue and Certain Expenses is the responsibility of the
Property's management. Our responsibility is to express an opinion on the
Statement of Revenue and Certain Expenses based on our audit.
We conducted our audit in accordance with the standards of the Public Accounting
Oversight Board (United States). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the Statement of
Revenue and Certain Expenses is free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures made
in the Statement of Revenue and Certain Expenses. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the Statement of
Revenue and Certain Expenses. We believe that our audit provides a reasonable
basis for our opinion.
The accompanying Statement of Revenue and Certain Expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in Government Properties Trust, Inc.'s Current
Report on Form 8-K as described in Note 2, and is not intended to be a complete
presentation of the Property's revenue and expenses.
In our opinion, the Statement of Revenue and Certain Expenses referred to above
presents fairly, in all material respects, the revenue and certain expenses
described in Note 2 for the nine months ended September 30, 2003 in conformity
with U.S. generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
December 23, 2003
4
UNITED STATES FEDERAL BUREAU OF INVESTIGATION BRANCH OFFICE --
PITTSBURGH, PENNSYLVANIA
STATEMENTS OF REVENUE AND CERTAIN EXPENSES
THREE MONTHS NINE MONTHS
ENDED ENDED
MARCH 31, SEPTEMBER 30,
2004 2003
---- ----
(UNAUDITED)
REVENUE
Rental income ............................... $ 802,439 $2,378,652
Tenant reimbursements ....................... 104 10,171
---------- ----------
802,543 2,388,823
CERTAIN EXPENSES
Utilities ................................... 48,075 128,362
Repairs and maintenance ..................... 49,780 97,670
Real estate taxes ........................... 102,030 251,910
Cleaning .................................... 31,345 91,996
Salaries .................................... 19,826 58,026
Insurance ................................... 4,167 12,501
Management fees ............................. 10,000 30,000
Other expenses .............................. 1,571 21,374
---------- ----------
266,794 691,839
---------- ----------
Revenue in excess of certain expenses .......... $ 535,749 $1,696,984
========== ==========
See accompanying notes.
5
UNITED STATES FEDERAL BUREAU OF INVESTIGATION BRANCH OFFICE --
PITTSBURGH, PENNSYLVANIA
NOTES TO STATEMENTS OF REVENUE AND CERTAIN EXPENSES
1. DESCRIPTION OF THE PROPERTY
The United States Federal Bureau of Investigation Branch Office - Pittsburgh,
Pennsylvania (the Property), located at 3311 East Carson Street, Pittsburgh,
Pennsylvania is an office that is 100% leased to the United States Federal
Bureau of Investigation with the lease expiring in October 2016, with options to
extend the lease for two additional five-year terms.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying statement of revenue and certain expenses for the nine months
ended September 30, 2003 was prepared for purposes of complying with the rules
and regulations of the Securities and Exchange Commission. The accompanying
financial statements are not representative of the actual operations of the
Property for the periods presented nor indicative of future operations as
certain expenses, primarily depreciation, amortization and interest expense,
which may not be comparable to the expenses expected to be incurred by the
Company in future operations of Property, have been excluded.
In preparation of the statement of revenues and certain expenses in conformity
with U.S. generally accepted accounting principles, management makes estimates
and assumptions that affect the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from these estimates.
Rental income is recorded when due from the tenant under the term of the lease,
which requires monthly rental payments of $264,295 through the term of the
lease.
The Property is managed by an affiliate of the current owner under a management
agreement that requires fees to be paid at a flat rate of $3,333 per month.
3. INTERIM PERIOD (UNAUDITED)
The unaudited statement of revenue and certain expenses for the three months
ended March 31, 2004, has been prepared for purposes of complying with the rules
and regulations of the Securities and Exchange Commission. In the opinion of
management, all adjustments considered necessary for a fair presentation have
been included. Operating results for the three months ended March 31, 2004 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2004.
6
GOVERNMENT PROPERTIES TRUST, INC.
FOOD & DRUG ADMINISTRATION DISTRICT HEADQUARTERS - LENEXA, KANSAS
STATEMENTS OF REVENUE AND CERTAIN EXPENSES
FOR THE THREE MONTHS ENDED MARCH 31, 2004 (UNAUDITED) AND
FOR THE YEAR ENDED DECEMBER 31, 2003
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors of
Government Properties Trust, Inc.
We have audited the accompanying Statement of Revenue and Certain Expenses of
Food & Drug Administration District Headquarters - Lenexa, Kansas (the Property)
for the year ended December 31, 2003. The Statement of Revenue and Certain
Expenses is the responsibility of the Property's management. Our responsibility
is to express an opinion on the Statement of Revenue and Certain Expenses based
on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the Statement
of Revenue and Certain Expenses is free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures made in the Statement of Revenue and Certain Expenses. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of the Statement
of Revenue and Certain Expenses. We believe that our audit provides a reasonable
basis for our opinion.
The accompanying Statement of Revenue and Certain Expenses was prepared for the
purpose of complying with the rules and regulations of the Securities and
Exchange Commission for inclusion in Government Properties Trust, Inc.'s Current
Report on Form 8-K as described in Note 2, and is not intended to be a complete
presentation of the Property's revenue and expenses.
In our opinion, the Statement of Revenue and Certain Expenses referred to above
presents fairly, in all material respects, the revenue and certain expenses
described in Note 2 for the year ended December 31, 2003 in conformity with U.S.
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
May 28, 2004
7
FOOD & DRUG ADMINISTRATION DISTRICT HEADQUARTERS - LENEXA, KANSAS
STATEMENTS OF REVENUE AND CERTAIN EXPENSES
THREE MONTHS
ENDED YEAR ENDED
MARCH 31, DECEMBER 31,
2004 (UNAUDITED) 2003
---------------- ----
REVENUE
Rental income ............................... $ 294,584 $1,176,946
Tenant reimbursements ....................... 13,199 48,985
---------- ----------
307,783 1,225,931
CERTAIN EXPENSES
Utilities ................................... 3,583 14,668
Repairs and maintenance ..................... 28,886 102,682
Real estate taxes ........................... 38,139 159,980
Cleaning .................................... 11,104 45,501
Insurance ................................... 3,824 20,656
Other expenses .............................. 3,678 5,212
---------- ----------
89,214 348,699
---------- ----------
Revenue in excess of certain expenses .......... $ 218,569 $ 877,232
========== ==========
See accompanying notes.
8
FOOD & DRUG ADMINISTRATION DISTRICT HEADQUARTERS -- LENEXA, KANSAS
NOTES TO STATEMENTS OF REVENUES AND CERTAIN EXPENSES
1. DESCRIPTION OF THE PROPERTY
The Food & Drug Administration District Headquarters -- Lenexa, Kansas (the
Property), located at 11510 West 80th Street, Lenexa, Kansas is an office
building that is 100% leased to the Food & Drug Administration pursuant to two
leases both expiring in 2012.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying statement of revenue and certain expenses for the year ended
December 31, 2003 was prepared for purposes of complying with the rules and
regulations of the Securities and Exchange Commission. The accompanying
financial statement is not representative of the actual operations of the
Property for the periods presented nor indicative of future operations as
certain expenses, primarily depreciation, amortization and interest expense,
which may not be comparable to the expenses expected to be incurred by the
Company in future operations of Property, have been excluded.
In preparation of the statement of revenues and certain expenses in conformity
with U.S. generally accepted accounting principles, management makes estimates
and assumptions that affect the reported amounts of revenues and expenses during
the reporting period. Actual results could differ from these estimates.
Rental income is recorded when due from the tenant under the term of the leases.
The current leases require monthly rental payments of $98,195 through the term
of the respective leases subject to annual rent increases based on the Consumer
Price Index, as defined. The leases also contain provisions to recover real
estate taxes at an amount in excess of the tenant's base year amount, as
defined. Such revenue is included in tenant reimbursements in the statement of
revenue and certain expenses.
3. INTERIM PERIOD (UNAUDITED)
The unaudited statement of revenue and certain expenses for the three months
ended March 31, 2004, has been prepared for purposes of complying with the rules
and regulations of the Securities and Exchange Commission. In the opinion of
management, all adjustments considered necessary for a fair presentation have
been included. Operating results for the three months ended March 31, 2004 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2004.
9
PRO FORMA CONSOLIDATED BALANCE SHEET (Unaudited)
On January 27, 2004, the Company completed its initial public offering (the
"Offering") and sold approximately 19.7 million common shares and received
approximately $177.0 million in net proceeds. The Company used a portion of the
proceeds to repay outstanding lines of credit and mortgage debt on previously
owned properties and intends to use the majority of the remaining proceeds to
acquire additional properties.
On March 1, 2004, the Company completed its previously announced acquisition of
the United States Bureau of Public Debt Backup Facility in Mineral Wells, WV
(the Mineral Wells Property) for approximately $5 million. The Mineral Wells
Property, completed in 2003, is fully leased by the federal government under a
modified gross lease. The property is occupied by the United States Bureau of
Public Debt and totals over 38,000 leasable square feet of office space. The
current lease expires in September 2017.
The net effect of the Offering and purchase of the Mineral Wells Property are
reflected in the Company's consolidated historical balance sheet at March 31,
2004.
The accompanying unaudited Pro Forma Consolidated Balance Sheet of the Company
is presented as if the Pittsburgh Property and the Lenexa Property had been
acquired on March 31, 2004. This Pro Forma Consolidated Balance Sheet should be
read in conjunction with the Company's historical consolidated financial
statements and notes thereto as filed on Form 10-K for the year ended December
31, 2003 and on Form 10-Q for the three months ended March 31, 2004. In
management's opinion, all adjustments necessary to reflect the acquisitions of
the Pittsburgh Property and Lenexa Property have been made. The following Pro
Forma Consolidated Balance Sheet is not necessarily indicative of what the
actual financial position would have been assuming the above transactions had
been consummated at March 31, 2004, nor does it purport to represent the future
financial position of the Company.
10
GOVERNMENT PROPERTIES TRUST, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
MARCH 31, 2004
(UNAUDITED)
HISTORICAL (A) PITTSBURGH (B) LENEXA (C) PRO FORMA
-------------- -------------- ---------- ---------
ASSETS
Real estate at cost:
Land .................................................. $ 5,308,237 $ 1,135,000 $ 1,250,000 $ 7,693,237
Buildings and improvements ............................ 27,211,715 22,789,170 8,021,534 58,022,419
Tenant origination costs .............................. 6,769,146 4,758,506 1,253,759 12,781,411
Furniture and equipment ............................... 59,060 -- -- 59,060
------------- ------------- ------------- -------------
39,348,158 28,682,676 10,525,293 78,556,127
Accumulated depreciation .............................. (1,037,509) -- -- (1,037,509)
------------- ------------- ------------- -------------
38,310,649 28,682,676 10,525,293 77,518,618
Cash and cash equivalents ................................ 149,521,349 (28,915,510) (10,530,953) 110,074,886
Restricted cash escrows .................................. 199,798 250,000 -- 449,798
Restricted cash for letter of credit ..................... 17,336,718 -- -- 17,336,718
Tenant receivables ....................................... 385,831 -- -- 385,831
Notes receivable from tenant ............................. 815,884 -- -- 815,884
Deferred costs, net ...................................... 121,865 -- -- 121,865
Real estate deposits ..................................... 1,000,000 (200,000) (100,000) 700,000
Property held for sale ................................... 4,271,071 -- -- 4,271,071
Other assets ............................................. 760,979 182,834 105,660 1,049,473
------------- ------------- ------------- -------------
Total assets ............................................. $ 212,724,144 $ -- $ -- $ 212,724,144
============= ============= ============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued expenses ................. $ 848,316 $ -- $ -- $ 848,316
Dividend payable ...................................... 3,102,075 -- -- 3,102,075
Mortgage notes payable ................................ 24,569,360 -- -- 24,569,360
Liabilities related to property held for sale ......... 3,211,888 -- -- 3,211,888
------------- ------------- ------------- -------------
Total liabilities ........................................ 31,731,639 -- -- 31,731,639
Stockholders' equity:
Common stock ($0.01 par value at March 31, 2004;
50,000,000 shares authorized, 20,680,502 shares
issued and outstanding at March 31, 2004) ........... 205,093 -- -- 205,093
Accumulated deficit ................................... (3,302,324) -- -- (3,302,324)
Additional paid-in capital ............................ 187,709,088 -- -- 187,709,088
Dividends declared .................................... (3,619,352) -- -- (3,619,352)
------------- ------------- ------------- -------------
Total stockholders' equity ............................... 180,992,505 -- -- 180,992,505
------------- ------------- ------------- -------------
Total liabilities and stockholders' equity ............... $ 212,724,144 $ -- $ -- $ 212,724,144
============= ============= ============= =============
See accompanying notes.
11
NOTES TO PRO FORMA CONSOLIDATED BALANCE SHEET (Unaudited)
(A) Represents the historical consolidated balance sheet of the Company as of
March 31, 2004.
(B) Reflects the acquisition of the Pittsburgh Property on May 4, 2004 for a
total purchase price of approximately $28.7 million. The amounts presented
include the initial purchase price of $27.8 million and closing costs of $0.9
million and were allocated based on the fair market value of the assets
acquired. There were no liabilities assumed and the purchase price was funded
with cash on hand.
(C) Reflects the acquisition of the Lenexa Property on June 14, 2004 for a total
purchase price of approximately $10.5 million. The amounts presented include the
initial purchase price and subsequent closing costs and were allocated based on
the fair market value of the assets acquired. There were no liabilities assumed
and the purchase price was funded with cash on hand.
12
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
The accompanying unaudited Pro Forma Consolidated Statements of Operations for
the three month period ended March 31, 2004 and for the year ended December 31,
2003 of the Company is presented as if the Pittsburgh Property, Lenexa Property,
Mineral Wells Property and other properties acquired in 2003 (the "2003 Acquired
Properties), collectively the "Acquired Properties", had been acquired on
January 1, 2003. These Pro Forma Consolidated Statements of Operations should be
read in conjunction with the Company's historical consolidated financial
statements and notes thereto as filed on Form 10-K for the year ended December
31, 2003 and on Form 10-Q for the three months ended March 31, 2004. In
management's opinion, all adjustments necessary to reflect the above
acquisitions have been made.
The unaudited Pro Forma Consolidated Statements of Operations are not
necessarily indicative of what the actual results of operations would have been
for the three month period ended March 31, 2004 or for the year ended December
31, 2003 assuming the above transactions had been consummated at January 1,
2003, nor does it purport to represent the future results of operations of the
Company.
13
GOVERNMENT PROPERTIES TRUST, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2003
(UNAUDITED)
MINERAL
HISTORICAL (A) WELLS (B) PITTSBURGH(B) LENEXA (B)
-------------- --------- ------------- ----------
Revenue
Rental income ........................................... $ 2,812,476 $ 573,843 $ 3,171,536 $ 1,176,946
Tenant reimbursements ................................... -- -- 13,561 48,985
----------- ----------- ----------- -----------
Total revenue ............................................. 2,812,476 573,843 3,185,097 1,225,931
Expenses
Property operations ..................................... 623,147 66,657 586,572 188,719
Real estate taxes ....................................... 238,201 14,692 335,880 159,980
Depreciation and amortization ........................... 764,090 -- -- --
General and administrative .............................. 440,668 -- -- --
----------- ----------- ----------- -----------
Total expenses ............................................ 2,066,106 81,349 922,452 348,699
----------- ----------- ----------- -----------
Operating income (loss) ................................... 746,370 492,494 2,262,645 877,232
Other income .............................................. 21,635 -- -- --
Interest expense
Expense ................................................. (1,188,048) -- -- --
Amortization of deferred financing fees ................. (9,230) -- -- --
----------- ----------- ----------- -----------
Income (loss) from continuing operations .................. $ (429,273) $ 492,494 $ 2,262,645 $ 877,232
=========== =========== =========== ===========
Earnings (loss) per share from continuing operations
(basic and diluted) ..................................... $ (0.51)
===========
Weighted average shares outstanding (basic and diluted) ... 836,133
===========
2003 ACQUIRED ADJUSTMENTS
PROPERTIES(B) (C), (D) PRO FORMA
------------- -------- ---------
Revenue
Rental income ........................................... $ 1,183,253 $ -- $ 8,918,054
Tenant reimbursements ................................... -- -- 62,546
----------- ----------- -----------
Total revenue ............................................. 1,183,253 -- 8,980,600
Expenses
Property operations ..................................... 278,385 -- 1,743,480
Real estate taxes ....................................... 110,039 -- 858,792
Depreciation and amortization ........................... -- 1,786,337 2,550,427
General and administrative .............................. -- -- 440,668
----------- ----------- -----------
Total expenses ............................................ 388,424 1,786,337 5,593,367
----------- ----------- -----------
Operating income (loss) ................................... 794,829 (1,786,337) 3,387,233
Other income .............................................. -- -- 21,635
Interest expense
Expense ................................................. -- (308,187) (1,496,235)
Amortization of deferred financing fees ................. -- (5,115) (14,345)
----------- ----------- -----------
Income (loss) from continuing operations .................. $ 794,829 $(2,099,639) $ 1,898,288
=========== =========== ===========
Earnings (loss) per share from continuing operations
(basic and diluted) ..................................... $ 0.09
===========
Weighted average shares outstanding (basic and diluted) ... 19,844,369 20,680,502
=========== ===========
See accompanying notes.
14
GOVERNMENT PROPERTIES TRUST, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2004 (UNAUDITED)
MINERAL ADJUSTMENTS
HISTORICAL(A) WELLS(B) PITTSBURGH(B) LENEXA(B) (C), (D) PRO FORMA
------------- -------- ------------- --------- -------- ---------
Revenue
Rental income .............................. $ 1,043,993 $ 80,850 $ 802,439 $ 294,584 $ -- $ 2,221,866
Tenant reimbursements ...................... -- -- 104 13,199 -- 13,303
------------ -------- ------------ --------- ----------- ------------
Total revenue ................................ 1,043,993 80,850 802,543 307,783 -- 2,235,169
Expenses
Property operations ........................ 247,778 16,906 164,764 51,075 -- 480,523
Real estate taxes .......................... 148,097 1,556 102,030 38,139 -- 289,822
Depreciation and amortization .............. 280,109 -- -- -- 356,310 636,419
General and administrative ................. 1,030,544 -- -- -- -- 1,030,544
------------ -------- ------------ --------- ----------- ------------
Total expenses ............................... 1,706,528 18,462 266,794 89,214 356,310 2,437,308
------------ -------- ------------ --------- ----------- ------------
Operating income (loss) ...................... (662,535) 62,388 535,749 218,569 (356,310) (202,139)
Other income ................................. 243,269 -- -- -- -- 243,269
Interest expense
Expense .................................... (398,829) -- -- -- 42,377 (356,452)
Expense from issuance of warrant ........... (2,097,900) -- -- -- -- (2,097,900)
Amortization of deferred financing fees .... (3,614) -- -- -- -- (3,614)
------------ -------- ------------ --------- ----------- ------------
Income (loss) from continuing operations ..... $ (2,919,609) $ 62,388 $ 535,749 $ 218,569 $ (313,933) $ (2,416,836)
============ ======== ============ ========= =========== ============
Loss per share from continuing
operations (basic and diluted) ............. $ (0.20) $ (0.12)
============ ============
Weighted average shares outstanding
(basic and diluted) ........................ 14,712,297 5,968,205 20,680,502
============ =========== ============
See accompanying notes.
15
NOTES TO PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(A) Represents the historical consolidated statements of operations of the
Company. The historical consolidated statement of operations for the year ended
December 31, 2003 has been reclassified to reflect the Harahan property as a
discontinued operation.
(B) Represents the historical operations for the Mineral Wells Property, the
Pittsburgh Property, the Lenexa Property and the 2003 Acquired Properties prior
to the Company's date of acquisition. Audited historical financial information
for the Mineral Wells Property was included in the Company's registration
statement related to the Offering. Audited and unaudited historical financial
information for the Pittsburgh Property and the Lenexa Property are included in
this report on Form 8-K/A.
(C) Represents pro forma adjustments related to the Company's ownership of the
Acquired Properties prior to its date of acquisition:
ADJUSTMENTS FOR ADJUSTMENTS FOR
THREE MONTHS YEAR ENDED
ENDED DECEMBER 31,
MARCH 31, 2004 2003
-------------- ----
DEPRECIATION AND AMORTIZATION (1)
Mineral Wells .................................. $ 24,222 $ 145,332
Pittsburgh ..................................... 241,893 967,572
Lenexa ......................................... 90,195 360,780
2003 Acquired Properties ....................... -- 312,653
---------- ----------
Total depreciation and amortization expense $ 356,310 $1,786,337
========== ==========
INTEREST EXPENSE (2)
2003 Acquired Properties ....................... $ -- $ 458,444
========== ==========
AMORTIZATION OF DEFERRED FINANCING FEES (2)
2003 Acquired Properties ....................... $ -- $ 5,115
========== ==========
(1) Represents estimated depreciation and amortization of the acquired
properties based upon the preliminary purchase price allocations in
accordance with our depreciation and amortization policy.
(2) Represents estimated interest expense for the individual 2003
Acquired Properties' mortgage debt, including stated interest rate
and amortization of deferred loan fees.
16
(D) Represents pro forma adjustments related to the Company's Offering and the
related effects on the Consolidated Statements of Operations as if the Offering
had occurred on January 1, 2003:
ADJUSTMENTS FOR ADJUSTMENTS FOR
ENDED YEAR ENDED
THREE MONTHS DECEMBER 31,
MARCH 31, 2004 2003
-------------- ----
INTEREST EXPENSE (1)
Elimination of interest expense on debt repaid from
Offering proceeds related to 2003 Acquired Properties $ (42,377) $ (150,257)
============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING (2)
Adjustment to reflect the total number of shares
outstanding after the Offering ...................... 5,968,205 19,844,369
============ ============
(1) In connection with the Offering, the Company used a portion of the
proceeds to repay lines of credit and mortgage debt outstanding on the
2003 Acquired Properties. This adjustment eliminates interest expense
associated with the lines of credit and mortgage debt that was repaid.
(2) The adjustment increases the weighted average shares outstanding to
20,680,502, which is the total number of shares outstanding after the
Offering. This adjustment along with the net effect of the other pro forma
adjustments have changed the pro forma earnings per share amounts.
17
(C) Exhibits
The following exhibit is included in this Report:
Exhibit 23.1 Consent of Ernst & Young LLP
18
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GOVERNMENT PROPERTIES TRUST, INC.
Date: July 16, 2004 By: /s/ Nancy D. Olson
--------------------------------
Nancy D. Olson
Chief Financial Officer and Treasurer
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EXHIBIT INDEX
EXHIBIT NUMBER DESCRIPTION
23.1 Consent of Ernst & Young LLP
20